Prospects

An iconic billboard in the quintessential boom city of Shenzhen features Deng’s famous statement that China's “basic line will not waver for 100 years.” If Deng was right, we are less than one-third of the way into the era of “reform and opening.” But four challenges identified by Premier Wen Jiabao in 2010, that growth becomes “unbalanced, unstable, uncoordinated, or unsustainable,” threaten the boom. The key to balance lies in increasing the consumer share of GDP, allowing China to create a modern consumer economy. Stability will depend on the government's ability to address grievances as the gap between winners and losers widens. Coordination is the great test facing the ruling Communist Party, of whether it can manage the politics of growth without fundamental changes to the system. Sustainability is an issue that has global implications, as citizens of a warming planet watch anxiously to see if China is successful in greening the boom. The fifth great challenge, left out by Premier Wen, may be the external one: whether the world is successful in making room for China.

China Still Has Many Places to Develop

China is a Maturing Dancer

Reform Transformed the Countryside

US and China Are in the Same Boat

China is Like a Raft in Category 5 White Water

Elizabeth Economy

Director for Asia Studies, Council on Foreign Relations

Elizabeth Economy is the C.V. Starr senior fellow and director for Asia studies at the Council on Foreign Relations. Economy has published widely on both Chinese domestic and foreign policy. Her most recent book, The River Runs Black: The Environmental Challenge to China’s Future (Cornell University Press, 2004), won the 2005 International Convention on Asia Scholars Award for the best social sciences book published on Asia, and was named one of the University of Cambridge’s Top 50 Sustainability Books in 2008 and one of the top ten books of 2004 by the Globalist. She has published articles in foreign policy and scholarly journals including Foreign Affairs, Harvard Business Review, Survival, and Current History; and op-eds in the New York Times, the Washington Post, and the International Herald Tribune, among others. She is a frequent guest on nationally broadcast radio and television programs, has testified before Congress on numerous occasions, and regularly consults for US government agencies and companies. Dr. Economy received her Ph.D. from the University of Michigan, her AM from Stanford University and her BA from Swarthmore College.

Well, I think it’s important to understand that, again, environmental degradation didn’t begin with the reform period. In fact, there was a very dramatic ratcheting up of pollution and degradation in China during Mao. Beijing, for example, went from having a few factories to having something like 7000 factories inside the sort of broader city limits. That's really quite extraordinary. Pollution was skyrocketing during the Mao period. You had the backyard steel furnaces, you had the Great Leap Forward, devastating to agriculture. So, all of these things sort of contributed to a very dramatic increase in both environmental pollution and degradation in the pre-reform period. I think, once the reform period hit, what you began to have, first, was the beginnings of a recognition that the environment mattered. So, you had the draft environmental law that started in 1979, came into force by 1989. You had the initial steps for an environmental protection agency within China. So, these were the positive moves. You had the beginning of drafting of more detailed laws and regulations, the formation of an environmental protection committee within the National People's Congress. So, all of these were sort of the positive steps within the Chinese government that said, “Whoa, we recognize that this, what would become a pre-reform period, really exerted a very devastating toll on our environment.” At the same time, however, you had the drive to develop. And I think it’s tempting sometimes to look back over the past 30 years or so, and just think of China’s economic reform process as this beautifully orchestrated dance. Somehow it all unfolded just perfectly. But, unfortunately for the environment, it was not so perfect. And the very rapid economic development, the proliferation of the Township and Village Enterprises, in fact, which had absolutely no environmental regulation whatsoever -- simply dump their effluence into the nearest stream or river -- no real laws to govern emissions from factories or from coal-fired power plants, all of this just caused the environmental pollution to skyrocket in the country. So, even as they were taking the steps to develop this environmental infrastructure, this bureaucratic infrastructure, the imperative to grow far exceeded anything they were able to accomplish in terms of trying to balance the environment and development. I remember at one point, when I was looking at the debate or the discussions about the environment, this was in the aftermath of Rio, the first sort of discussions on climate change in 1992, there was a sort of a debate going on within the Chinese media talking about sustainable development, which had become sort of the watchwords, bywords, of the whole environmental movement globally. But, in China, it was translated as “sustained development,” and what that meant was, "How do we sustain our development?" So, I think that there was sort of a free for all in terms of thinking about the environment, about water in particular, about land, as just this ah renewable, expendable kind of resource. And it’s only been within, I think, the past 6-7 years that that notion has truly been challenged in an important respect. I think, certainly, China, in a very pure sense, has derived a lot of economic benefit from its failure to protect the environment over the past 30 years. So, in a short-term, narrow kind of context, I think GDP growth has been faster and greater for much of this period because, in fact, they have allowed factories simply to dump their water downstream and because they didn’t pay for the consequences of doing that in some fundamental ways. For example, they don’t have a public health system that requires them to treat the people that are made sick by this polluted water. So, it’s so hard for them to internalize the cost, in some respects, of this environmentally damaging behavior if you don’t feel it in other ways. So, you might feel it in terms of social unrest, which they certainly have, but again, that’s not something, necessarily, you put a price tag on immediately. And so, I think there have been clear ways in which economic development has proceeded far more rapidly because they haven’t put scrubbers on their coal-fired power plants. You know, scrubbers lower the efficiency of a power plant by maybe 2 to 3 %, so that’s a direct economic cost to do something that’s right for the environment. Now, maybe that translates, over the long term, into better public health for the people, or to better agricultural productivity because you don’t have acid rain that ruins crops. But, then again, those things are hard to sketch out and they’re hard to do over the longer term. So, from a short-term perspective, they’ve benefited. From the long-term perspective, they’re going to pay, and already are paying, a very high price.